Sap Scm Notes

7/25/2019 Sap Scm Notes

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a. Client level data

b. Plant level

c. Storage location level a storage location will typically but may not always store:

Raw materials

omponent materials

Maintenance and Repair materials !MRO"

Enineerin&desin datais managed mainly on a lient level.

Material master records are grouped according to industry sector and material type.

a. The ind'stry se$t"rdetermines which industry#specific data appears in the material master

record. $t also determines the order in which the screen appears.

b. The material ty(edetermines which departments can enter data and whether %uantities and&or

values are updated in the inventory management.

- A material type groups together materials that are in common.

he material type controls

a. 2hich departments %iews# are able to maintain material data.b. 2hether and how 3uantities and %alues are updated in the system.c. 2hether the material is procured internally or e4ternally.d. 2hich 5!/ accounts for e4ample) material stoc0 account# are updated.

Material type codes

-ER 6 finished product

+A/7 6 Semi8finished product

99999 8 Raw materials

he industry sector determines which bran$) "f ind'strythe material is assigned to.he industry sector determines

a. 'hich screens appear and in which order.

b. 'hich industry#specific data appears.

Material Master Data :iews

a. 7asic datab. MRP

c. Plant!storage location

d. Accountinge. Mar0eting etc.

(mportant MRP Data %iews

a. MRP1b. MRP$c. MRP"d. MRP;


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7AS(C DAA :(E2 6 he basic data %iews contain Client /e%el Data. he data is common across all the

plants.

MRP*%

MRP ype data %iew 6 the method by which this material will be planned for replenishment. E4 PD 6

MRP Material Re3uirement Planning#.

/ot Si'e 6 to determine the 3uantity of any replenishment orders produced by MRP.

Eg E< 6 /ot for lot8order 3uantity.

MRP+:

Procurement type E in8house production# ego#

- 6 e4ternal procurement far away#

< 6 both procurement types

- =o procurement.

Schedule Margin >ey

MRP3%

Stratey ,r"'( all"ws 's t" (lan f"r f"re$asts and $'st"mer "rders-

MRP.%

Prod!:ersions chec0bo4 8

/"re$astin iew%

Period indicator. Eg 6 trend model.

"r1 S$)ed'lin 2iew:

(nformation for in8house production.

Setup time) Processing time) (nteroperation and 7ase ?uantity. (nteroperation time is the time when

material mo%es between %arious stages of production.

T)e set'( time and inter"(erati"n time are n"t de(endent '("n t)e base 'antity- T)e (r"$essin time

is de(endent "n t)e base 'antity-

4ON/I,URATIONS IN T5E MATERIAL MASTER

he following configurations are a%ailable for the material master

- Define new material types

- Define display for data %iews by user8id

- Re8organi'ation of data %iews

- Determination of re3uired fields

- Definition of warning!error messages companion messages#


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Maintenan$e "f t)e MM%

- @se of profiles to populate default %alues. A (r"file may be defined t)at will

a't"mati$ally ("('late $ertain MM fields wit) s(e$ifi$ data-- Mass maintenance 6 allows mass changes to the MM by material type.

- Engineering change control 6 essential to document the history of changes to the MM.

6USINESS PRO4ESS 7I//I4ULTIES%

a. Inent"ry Manaement6 determining the best in%entory policy and managing the in%entory

balance.b. Material sele$ti"n6 different material numbersthat describe the same material.c. Material S"'r$in6 too many sourcesfor the same material. hus) cant get the best pricing.d. nactive materials

1. Purging in%entory of inacti%e materials.

$. (dentifying the replacement material.e- Maintainin data in SAP

. Centrali'ed %s de8centrali'ed data maintenance responsibility

. (nade3uate ( security for data maintenance.

6ILL O/ MATERIAL UNIT80.

( bill of material is a complete) formally structured list of the components that make up a product or

assembly. The list contains a description and ob*ect number for each component) together with the

%uantity and unit of measure.

he 7&M masters must be integrated with many areas of SAP such as Sales sales order#) Production

MRP) Planned orders) production orders#) Accounting Cost#) Materials mgmt. Purchasing) 2arehouse#etc.

7&M CAE5&R(ES

a- Material 6OM+ material re3d. for a 7&Mb. Sales order 7&Mc. 27S 7&M 6 2or0 7rea0down Structured. Document 7&Me. E3uipment 7&Mf. -unction /ocation 7&M

6OM USA,E

Material 7&M

a. Production operations#b. Costing price#c. Sales order 3uantity#d. Plant Maintenance /ocation data#


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e. Engineering echnical data#

Area of !alidity

- t defines t"e valid #ses of $OM

-

(t helps to decide which plants would be utili'ed to produce the material. (t can be one ormore plants. )en a 6OM is $reated9 t)e SAP system will assin a n'meri$al identifier

t" t)at 6OM- It is $alled as a Internal n'mber-All 7&Ms will ha%e a uni3ue number.- A special case where a 7&M is shared common among a number of different plants is a

5roup 7&M. A group of plants share this common 7&M.

- here can be reasons for which a plant wants to change 7&M. (t can create a new 7&M

by copying from the original 7&M and ma0e the changes that needs to be made. 2hen

that 7&M is stored or sa%ed) SAP assigns a new internal number for it.- Effe$tiity datesof 7&M 6 :alid8to8date. (f an engineering or m0tg. dept. has a target)

we can determine that this material is not %alid after the %alidity date.

7&Ms are structured. /ow le%el code structure. /ow le%el codes are stored on the MM. he

low le%el codes are used for Material Re3uirements Planning MRP# purposes.

$OM S%R&C%&R'

a. (eader level6 Status) te4t) (nternal B and effecti%ity datesb. tem

- Sub8items

%"e item level "as different categories

a. Stoc0 itemb. =on8stoc0 itemc. :ariable8si'e itemd. e4t iteme. Document itemf. Class itemg. PM structure elementh. (ntra material

Each item has alternati%e items that can be used.

-or e4. he item >1 could be substituted with >1a. (f >1 is not a%ailable) we can use the supply of >1a

through SAP substitution. he assumption is that any alternati%e item would ha%e the same form) fit or

e4actly e3ui%alent to the item that is replaced.

6OM MASTER 7ATA

6OM TE45NI4AL T:PES

here are " types of 7&Ms in SAP

a. Simple 7&M 6 1 product with fi4ed set of material itemsb. Alternati%e 7&M 6 1 product with multiple sets of material itemsc. :ariant 7&M 6 multiple products with multiple sets of material items

The ,OM technical type is stored in the6OM 5eader-


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2+ @SE E=5(=EER(=5 C+A=5E M5M9

- (t can be used for monitoring and documentation of changes.

- Planning and e4ecution at a specific point in time

- Sa%ing of se%eral change states of the same obect

- (ntegration in the supply chain

- Collation of changes that belong together

Enineerin $)ane mmt- is sinifi$antly 'sed t" "bsere t)e 5ist"ry "f $)anes-

7&M Reporting -unctions

- $OM ')plosion

- Structural display

- *"ere+#sed lists

- 7&M comparisons

- Mass C"anges

- Product structure

- 7&M browser

7&M E4plosion 6 it describes the le%el by le%el report of the 3uantities re3uired for each material.

2here8used lists 6 if a particular material that is considered by engineering for obsoleting) we need to

analy'e where this material is used.

7&M Comparison 6 it is used to compare two 7&Ms to see what is common

Mass 4)ane in 6OMs

SAP pro%ides some functionality to maintain 7&M in a cost effecti%e way. 2hen a component


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c. Contractd. Scheduling agreemente. ?uota arrangement 6 w)i$) s"'r$e "f s'((ly is t" be assined t" a re'irement

:E=D&R MASER

(t consists of " le%els of data- ,eneral 7ata6 data that applies e3ually to each company code within your enterprise

address) phone) language etc.#- 4"m(any $"de data6 company code le%el payment transactions) number of control

account etc.#

- P'r$)asin data6 data of importance with regard to your enterprises purchasing

acti%ities and which is 0ept at purchasing organi'ation le%el contact person) terms of

deli%ery etc.#

:endor Master Data pulled from database when creating purchasing orders#

- Master records must be created for e%ery %endor

- 4"ntains $entrali!ed data f"r b"t) MM and /inan$ial A$$"'ntin =/I>

Purchasing (nformation Record 6 it will build upon the %endor master. 2e ha%e to 0now what materials

this %endor is going to supply.

- Data such as prices and conditions that you can store for the rele%ant purchasing

organi'ation or plant.- =o. of last purchase order

- olerance limits for under8deli%eries or o%er8deli%eries

- he planned deli%ery time

- :ender e%aluation data

4"ntra$ts8 A contract is a type of "'tline ('r$)ase areementagainst which release orders releases#

can be issued for agreed materials when re3uired during a certain o%erall time8frame. Contracts may also

be used for ser%ices.

A purchase order is produced for each release order.

S$)ed'lin Areement6 $an s)"rten (r"$essin times and red'$e t)e am"'nt "f (a(erw"r1 re'ired

f"r a material "r seri$es deliery. &ne deli%ery schedule can replace a large number of discrete purchase

orders or contract release orders.S$)ed'lin areements are 'sed (rimarily f"r )i)er "l'me

(r"d'$ti"n w)en fre'ent delieries are made by s'((liers-

,#ota arrangements: +

(t is an instrument used in sourcing administration.

A 3uota arrangement di%ides the total re3uirement of a material o%er a period among certain sources of

supply by assigning a 3uota to each source.

2end"r =S'((lier> Eal'ati"n%

:endor e%aluation is the process of analy'ing and assessing the performance of your e4ternal suppliers.


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(t also constitutes a basis for %endor selection. :endors are awarded scores for a number of different

criteria. :endors o%erall scores can be used to determine whether they are retained in or eliminated from

your %endor base.

P'r$)asin 4y$le% E%erything depends on demand. 2e need to see if the demand can be supplied from

our in%entory. Else) we create a purchase re3uisition. Purchase re3uisition is a re3uest that an SAP system

will ma0e to purchase an item.

Purchase order is a legal contract between an entity and its supplier. A P& is a binding contract.

&nce the order is recei%ed we create a goods receipt and the %endor orders an (n%oice receipt. he

in%oice is processed through the accounts payable system.

PR is a re3uest by a user or a process such as MRP to the purchasing dept. for purchasing a material or

ser%ice.

A purchase re3uisition can be created

a. Manually

b. MRPc. Production

Purchase re3uisitions must be con%erted to purchase orders.

UNIT 0? PRO7U4TION 7E/INITION PRO4ESS

&nce the product is designed and the materials are defined) the production definition process may begin.

/eading edge companies use Conc#rrent 'ngineeringas a tool to reduce the o%erall product and

production definition time.

A manufacturing company must first define its production process type before it can define more

production details.

he(rimary (r"$ess ty(esare

a. @"b S)"(6 low %olume) high %ariety) fle4ible e3uipment) intermittent production if the %olume

is low) we need not produce the product e%ery day. his is defined as intermittent production#.b. Pr"$ess6 medium %olume) lower %ariety) fle4ible e3uipment) intermittent production.c. Re(etitie6 high %olume) low %ariety) speciali'ed e3uipment. E4 Automobiles few types and

the e3uipment used are %ery customi'ed#.d. 4"ntin'"'s6 %ery high %olume) low %ariety) speciali'ed e3uipment) continuous production. E4

&il) gas products. Steel industry.

he master data needed for the product definition process are

a. 2or0 centerb. Routingc. Production Resource ool PR 6 tool that supports the production but not used in the process#.

&nly for Sub8Contracted ser%ices

d- P'r$)asin inf"rmati"n re$"rd-

e- 4"ntra$ts

f- S$)ed'lin areements


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- '"ta arranements

he organi'ational data used in the production definition process area. Company codeb. Plantc. Purchasing organi'ation

d. Storage locatione. 2arehouse

T)e Pr"d'$ti"n 7efiniti"n Pr"$ess STEPS

Sele$t t)e (r"$ess ty(e6 the %olume) the %ariety) e3uipment that we ha%e and choosing the

process type accordingly.

4reate "r1 4enter Masters6 what resources we ha%e within our facility.

4reatin R"'tin masters6 se3uential flow of how the material needs to flow

4reate PRT Masters6 tools that are necessary to support the production.

Lin1 6OM t" r"'tin6 to show what materials are needed in each step of routing.

Lin1 PRT t" R"'tin6 /in0ing production resource to routing.

ORB 4ENTER MASTER

An organi'ational unit that defines where a production acti%ity should be carried out.

hey include

- Machines

- People

- Production lines

2or0 centers ha%e the following

- Defined capacity

- Shift start!end times- arget utili'ation

E4 >itchen would ha%e a number of wor0 centers such as &%en) Dish washer etc.

2or0 center categories 6

Production 2or0 Center

2or0 Center @sages

a. Scheduling 6 formulae and wait times.b. Costing center

2or0 Center Data


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a. 5eneral datab. Default %alues of routingc. Capacity datad. Scheduling datae. Costing and +R data

he wor0 center is integrated in a number of ways. Scheduling 6 wor0ing time formulae. Capacityplanning) 2or0 center financial purposes) cost accounting) inspection criteria through 3uality mgmt.#)

Routings default %alues) standard %alue 0ey#.

Standard 2al'e Bey6 A std. val#e is an activity t"at -e typically perform at a -or center . 2e need

to prepare the 2C for a production acti%ity to perform. his is called as Set#p. A processing is done 6

thus machine time. -or each defined 2C) we setup up to F different std. %alues. &nce the std. %alues are

defined) then std. %alue 0ey is a combination of any of the std. %alues. his 0ey indicates what std.

acti%ities are performed at that 2C.

7efa'lt al'es in 4%

6a$1fl's)in we red'$e t)e inent"ry after we )ae $"m(leted t)e 'nits- (t comes under basic data.

C&=R&/ >E 6 defines what are the re3d. elements for a particular 2C. Can this 2C be used for

scheduling9 Must we perform confirmations at this 2C9A $"nfirmati"n is t)e n'mber "f 'nits t)at )as

$"m(leted (r"$essin at t)is 4-

C%R/ ey is the selection of those activities that have to be performed at this '. It defines t)e $"ntr"l

elements f"r an "(erati"n (erf"rmed at t)at w"r1 $enter-

Standard %e)t Operations

( template is a standard te-t.

se: fre%uently repeated description of a production lifecycle.

(pplication + 'ork center !default" and 'ork operation.

Aailable 4a(a$ity maintenan$e 'sin $entral s)ift se'en$e

On$e t)e s)ifts are determined9 we $an define t)e fa$t"ry $alendar- e first define t)e )"lidays- P'bli$

)"lidays are $"'ntry8s(e$ifi$- T)e )"liday $alendar is assined t" a fa$t"ry $alendar and t)en t)e

fa$t"ry $alendar is assined t" a (lant-

-actory calendar contains company specific dates such as alternate wor0ing Saturdays and holidays.

Production Costing 6 2C are used for costing.

ORB 4ENTER 5IERAR45:

CAPAC( CAE5&R(ES &- A 2&R> CE=ER

a. Energyb. Processing unitc. Machinery


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d. ransporte. /abor f. Storage

"r1 $enter&$a(a$ity

a. Mass changes 6 change std. %alue and default %alues.b. E%aluations 6 list of 2Cs) cost center assignments) wor0 center capacities) wor0 center

hierarchies) wor0 center!capacity usage) change documents.

7@S(=ESS PR&CESS (SS@ES RE/AED & 2&R> CE=ERS

a. +ow to define your plants wor0 centers9 Define 2C as a single one or as a groupb. Definition of alternate wor0 centers 6 e3uipment can be processed on more than one 2C.c. Capacity planning

d. Setup timee. Se3uencing orders

ROUTIN, MASTER 7ATA UNIT 0C

SAP defines a Tas1 list as a series "f ste(s "r (r"$ess fl"w t)at will $"m(lete a tas1-

Routings are integrated into financial accounting and capacity planning.

Some e4amples of tas0 list in SCM are

a. Production of materialsb. (nspections of materialsc. Maintenance of e3uipment

SAP AS> /(SS

SAP R!" supports the following types of tas0 lists.

- R"'tin =standard r"'tin> 'sed f"r


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A r"'tin m'st )ae at least * "(erati"n =a$tiity> and as many as needed t" des$ribe t)e

(r"d'$ti"n (r"$ess- T)e "(erati"ns m'st be assined in a $"rre$t se'en$e- Ea$)

"(erati"n is assined a n'mber-

(n any SAP software system) there is no intelligence in the system to detect any errors that

you may ha%e introduced by not listing the operations in se3uence.

Each operation on a routing must reference

a. the wor0 center where the acti%ity will ta0e placeb. +ow much time is re3uired to complete the acti%ity at that wor0 center

ROUTIN, USA,E

a. S$)ed'lin6 start and finish dateb. 4a(a$ity (lannin6 how much wor0 needs to be performed on a particular day or wee0.c. Pr"d'$ti"n&Assembly6 calculating time) control data) PRs) Material) ?uality assuranced. 4"stin6 Production costs) production o%erhead costs

ROUTIN, STRU4TURE

Each routing is associated with a material and a plant. Each routing is assigned with a routing group

number similar to the 7&M internal number#.

MAER(A/ 6 R&@(=5 5R&@P 6 SE?@E=CE 6 each se3uence will ha%e operations defined# 6

each operation will ha%e wor0 center) te4t) control data and times defined.

Each operation will ha%e certain tools defined to perform the operation. E4 PR G Production

Resource ools. (f there is an inspection operation) we analy'e the inspection criteria. Material

components and trigger points are also other tools.

,ROUP 4OUNTER6 similar to the alternati%e number. (f there is more than one se3uence thatproduces a particular material) then the se3uence is differentiated with a group counter number. T)ey

all will )ae a $"mm"n ROUTIN, ,ROUP NUM6ER. same material but more than one

se3uence#.

Assigning a component to a 7&M is optional. +owe%er) if there is not assignment of components to a

particular routing) then the general assumption is that all of the materials would be re3uired to

perform the first operation. Scheduling gi%es us more accurate results.

7@S(=ESS PR&CESS (SS@ES RE/AED & R&@(=5S

a. Accuracy of the operation times setup) machining time) labor time#b. (dentification of alternate se3uencesc. Confirmation stepsd. Planning for yield lossese. Planning for rewor0

ROUTIN, MASTER (art 6


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PR CAE5&R(ES

- Material Master

- PR master

-Document- E3uipment

SCRAP CAE5&R(ES and their effects

a. Component Scrap6 (ncreases re3uired 3uantity ofa component. Maintained in 7&M or

material master of a component. ield losses can be a component scrap.b. Assembly Scrap6 increases re3d. 3uantity of all components. Maintained in material master of

assembly.c. Operation Scrap6 reduces operation 3uantity of subse3uent operations.Maintained in r"'tin-

PRO7U4TION 2ERSION 8 UNIT D

Production :ersion

Production %ersion is a method of defining acceptable 7&M!routing combinations and under what

circumstances which should be used.

hey are a hard re3uirement for se%eral SCM solution areas

- AP&

- Process solution R!"#

- Repetiti%e manufacturing R!"#

%"e prod#ction version is not re0#ired for a 1ob s"op prod#ction.

he Prod%ersion determines the %arious production techni3ues that can be used to produce a material.

(t specifies

- he 7&M alternati%e for a 7&M e4plosion

- he tas0 list type) the tas0 list group and the group counter for the allocation to tas0 lists.

- /ot8si'e restrictions and area of %alidity

If t)ere is a (r"d'$ti"n ersi"n f"r a master data9 t)e ersi"nindi$at"r $)e$1b" is $)e$1ed.

Part $

Material Planning Process 6

he MRP is critical for those industries where products contain many sub8assemblies and components.

E4 aerospace) defense) computer) automobile) durable goods!

E4 of industries that are less dependent on MRP

- Metals steel and aluminum#


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- Semiconductor

Re'irements f"r ""d Material Plannin

- Acc#rate $OM

- Acc#rate nventory balances

-Acc#rate open order d#e dates6 we ha%e placed an order to a supplier in the past andthere is some due date associated to that material. hat material has not yet been

recei%ed. he due date that is associated with it is in future. (f the due date of this order is

in future) then it is current. (f the due date of an order was in the past) then it is not

current. (f a past order is not recei%ed) then SAP assumes that material is to be recei%ed

today but it is wrong#. &pen orders for many companies are bad.- Acc#rate config#ration management6 M0tg. and engineering ma0e small

enhancements to the configuration of the product. he configuration mgmt. defines when

these changes in the 7&M and it should be made sure if all these changes are correct.- Accurate forecasts

The primary ob*ective of material planning is to identify and resolve material shortages

bef"rethey impact production.

Master data used in PD process

a. Material Masterb. 7ill of Material Master

Organizational Data #sed in t"e Material Definition process

a. Company codeb. Plantc. Purchasing organi'ationd. Storage locatione. 2arehouse

Pr"$ess f"r Material Plannin

1. Select t"e planning "orizon6 how far are we going to do this process 6 the material

planning hori'on should be at least as long as the cumulati%e product lead time of the

products that we are planning for.$. Determine demand6 they can come in the format of forecast or in the form of a sales

order.". R#n Replenis"ment Planning6 loo0ing at the in%entory balances) loo0ing at the

demands and determine whether we ha%e sufficient in%entories to meet those demands. (f

not) then replenishment orders are done through planned orders and purchase

re3uisitions.;. dentity material s"ortages8 are re3uired to find the shortages in ad%ance to ta0e

correcti%e actions necessary at reasonable e4penses to operations.H. Resolve s"ortages8 can place new order to suppliers


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7EMAN7 MANA,EMENT O2ER2IE UNIT 0F

here are se%eral different types of independent demand that may or may not be rele%ant to Material

Re3uirements Planning

- Customer demand sales orders#

-Planned (ndependent Re3uirements forecasts#- Stoc0 transport re3uest

Demand management acts as a funnel to translate re3uirements or forecasts from a number of different

sources to whichMaterial Re'irements Plannin =MRP> and Master Pr"d'$ti"n S$)ed'lin =PS>can

plan.

he result or output of Demand Management is aNet Re'irementto MRP.

Demand Management is directed and go%erned by fields in the Material Master) primarily the

Re3uirement Strategy field.

Planning of re3uirement 3uantities and re3uirement dates for finished products and important assemblies)

and definition of the strategy for producing or procuring a particular finished product.Pr"d'$ti"n ty(es

Mae to stoc6 in a ma0e8to8stoc0 strategy) inventories m#st be on+"and before t"e demand arrives.

he retail industry and many other industries use this strategy

Mae to order6 inventories are not planned #ntil an order arrives. E4 aerospace and defense

industryuses this strategy.

Assemble to order semi+finis"ed and ra- material inventories m#st be on "and prior to t"e

arrival of act#al demand.+owe%er) the finished product in%entories are not planned until demand

arri%es. E4 the computer industry.

PLANNIN,

STRATE,IES

he planning strategy represents the procedure for what triggers 3uantity and timing of production of a

material.

A material production may be triggered by

- A forecast only

- A combination of a forecast and a customer order

- A customer order only

/"re$ast $"ns'm(ti"n als" 1n"wn as f"re$ast nettin is t)e (r"$ess "f a't"mati$ally ad


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Ma0e8to8stoc0 re3uirements strategy

- Ma0e8to8stoc0 production 1I

- Planning with final assembly ;I

- Planning at assembly le%el JI

MABE TO STO4B PLANNIN, in$l'des stratey *0 =ma1e t" st"$1> and stratey .0 =(lannin wit)final assembly>-

Stratey *0

- Product cycle time K time customer is willing to wait.

- Production %olume is high and repetiti%e.

S%RA%'23 45 -it"in t"e demand mgmt. d"es n"t $"ns'me t)e f"re$ast. 2hate%er forecast is there

for the product) any customer re3uests already for the product are ignored and it allows the full forecast to

be passed to MRP as net demand.

&ne of the limitations of Strategy 1I is that if customer orders e4ceed your forecast) then we cant build

according to customer orders.STRATE,: .0 will $"ns'me f"re$asts

MRP 6 DA%A !'* Strategy gro#p is -"ere t"ese strategies are defined.

7emand Manaement strateies are defined "n t)e Material Master-

Consumption mode is also done during the strategy.

- Consumption mode 1 6 bac0ward consumption only

- Consumption mode $ 6 bac0ward!forward consumption

- Consumption mode " 6 forward consumption only

- Consumption mode ; 6 forward!bac0ward consumption

SALES OR7ER

SA/ES &RDER 6 a type of independent demand. (t is a contractual agreement between a company and a

customer to deli%er material or ser%ices at an agreed price at a specific time.

7emand Mmt- will neer $"ns'me a sales "rder-

Aailable t" Pr"mise

- &ne of the potential chec0s that can be performed during a sales order entry

- (T/ is the calculated warehouse stock that is available to promise to any future customer

!sales order"

-AP is a highly configurable function within SAP

Stoc7Re0#irements /S% 8MD59

8(t is a %ery important transaction for SCM. (t will display in ascending

time se3uence all the demandsre3uirements# and suppliesstoc0s# for a material.


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MATERIAL REUIREMENTS PLANNIN, UNIT *0

Replenishment planning is a maor acti%ity in any supply chain mgmt. business function.

7asic techni3ues

a. :isualb. Re8order point 6 the economic order 3uantityc. Master Production schedule 6 finished product le%eld. MRPe. Distribution Re3uirements Planning 6 multi8tier distribution center le%elf. >anban

Ad%anced techni3ues

8linear programming

8other heuristic techni3ues

%-o different types of demand

ndependent demand 8forecasts; c#stomer orders

a. 5enerated by customer orders for finished productb. -airly stable 6 after allowances for seasonal %ariationsc. Re3uires in%entory to be carried continually

Dependent demand

a. 5enerated from higher le%el items

Producing 1III bicycles 6 wheels needed for producing needed to be categori'ed under dependent

demand. (t tends to be lumpy 6 certain 3uantities may be needed on a date and then the re3uirementchanges for other date.

+istory handling of dependent demand

a. Difficulty of ordering and scheduling assembled products.b. Enormous tas0 of

- Setting up schedules

- >eeping trac0 of large numbers of parts and components

- Coping with schedule and order changes

@sing in%entory techni3ues for independent demand 6 e4cessi%e in%entories

MRP

Comp#ter+based information system t"at translates master sc"ed#le re0#irements for end items

into time+p"ased re0#irements for s#bassemblies; components and ra- materials.

MR/ supplies the answers for:

'hat is needed 0


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1ow much is needed 0

'hen is it needed0

Producing or purchasing the right materials at the right time and ha%ing them a%ailable at the right places.

Ass'm(ti"ns in MRP%

a- Infinite $a(a$ity

b- /ied lead times

MRP 'ses LE2EL8by8LE2EL (lannin- Als" $alled as 6A4BAR7 S45E7ULIN,.

&rdering) fabrication and assembly schedules for

a. imely completion of end itemsb. >eeping in%entory le%els reasonably low

Prod#ct Str#ct#re tree::isual depiction of the re3uirements in a 7&M) where all components are listed

by le%els.

nventory Records6 include information on status of each item by time period.

85ross Re3uirements

8Schedules receipts

. Ma0e * buy parts

8Amount on hand

8/ead imes

8/ot si'es.

MRP PRO4ESSIN,

a. 5ross re3uirementsb. Schedule receipts 6 an order that has been placed. =ot yet completed but scheduled for some

future date.c. Proected on hand 6 in%entory balance of that item proected out in futured. =et re3uirements 6 re3uirements order that needs to be met.e. Planned8order receipts 6 when that order must arri%e to fulfil the demandf. Planned8order releases 6 when the order needs to be started to fulfil the demand.

ASSEM6L: TIME 45ART

a. Proected on8hand in%entory 6 e4pected amount of in%entory that will be on hand at the end of

each period.b. 5ross re3uirements 6 total e4pected demand for item or raw material in a time period without

regard to amount on hand.

Pr"


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Planned order releases6 planned amount to order in each time period procurement or production#

- Multiple of specific 3ty. batch si'e#

- ?ty. needed at that time

PART 6

MRP 4ONTROLLIN, MASTER 7ATA

PD 6 MRP

MRP1

MRP type

a. PD 6 based on independent re3uirements) additional control using re3uirement strategies MRP"#

b. Consumption based planning 6 :7 Reorder point planning#) :: 6 -orecast based planning) R1time based planning

Planning time fence is t"e no. of days into t"e f#t#re to-ards -"ic" MRP "as control of t"e order.

Any planned order t"at are inside t"e time fence MRP doesn


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- /ot+for lot+order he most commonly used. 2hat u need is what u get. Produces e4actly

the net re3d. 3ty. /owest in%entory cost.- =i)ed order 0ty.6 always produces or procures a fi4ed 3ty. regardless of the net re3d.

3ty. (t produces surplus in%entory.- Replenis" to ma)im#m stoc level6 produces or procures a 3ty. that will bring

in%entory to a ma4. stoc0 le%el as defined in the MM.b. Periodic lot+sizing proced#res:

a. he system groups se%eral re3uirement 3uantities within a time inter%al together to form a

lot.b. he time period lengths can be either days) wee0s) or months.

&ptimi'ing lot si'ing procedures 6 E&?

C L Storage costs &rdering costs

/O% S>?2 ?=/&'?C'RS

- /ot size ro#nding:we can adust the procurement 3uantities of deli%ery) pac0ing andtransport units of measure. Ma0ing the product to fit in pac0ing.

- Min7Ma) lot size.

)en 'sin r"'ndin and min&ma9 SAP first determines t)e l"t si!e 'sin min&ma9 t)en ad


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Scheduling margin 0ey 6 to get any materials ready for the production.

/EAD (ME SC+ED@/(=5 6 the data re3d. comes from routing.

a. -loat after production

b. &perations from the routing#c. -loat before production

St"$1 Re'irement List

T)e first line always s)"ws t)e aailable inent"ry

- Ea$) line "es in as$endin "rder

- RE4EI2E7 RE7 T: neatie side "n R5S "f n'mber indi$ates a demand-

- If a n'mber d"esnJt )ae a neatie n'mber9 it is a s'((ly-

E4ception messages 6 shows materials where schedules are not o0.

U(datin t)e MRP Plannin r'n

a. MRP attempts to mae reconcile and mae many ot"er c"anges by performing a net c"ange

planning r#n. %"e principle tool for managing t"e net c"ange is t"e P/A???2 =/'.

/lanning time fence + it specifies a period within which no automatic changes are to be made to the

master plan. The planning time fence is maintained in workdays.

=RM P/A??'D ORD'RS + even if an order is o#t of t"e time fence; a #ser can tae

control of it eliminating t"e MRP control. %"is is called as =irm Planned Orders.

a. -irming a planned order will essentially free'e the order 3uantity and scheduling dates.

b. ( MR/ run will not reschedule a firm planned order. $t will produce reschedule e-ception

messages.

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